Last month marked one year since Deputy Attorney General Sally Quillian Yates issued a much-discussed mandate directing federal prosecutors to focus on not just companies but also individual employees.

The U.S. Department of Justice announced its individual accountability policy, which emphasizes the department’s interest in holding individuals accountable for corporate wrongdoing, in a Sept. 9, 2015, memo issued by Deputy Attorney General Sally Yates. The policy is commonly referred to as the Yates memorandum, in keeping with the tradition of naming DOJ policies after the deputy attorneys general who issue them. The Yates memorandum was issued after numerous commentators criticized the DOJ for failure to bring individual prosecutions in the wake of the 2008-2009 financial crisis. The agreements the DOJ entered into with companies and financial institutions catalogued pervasive criminal conduct by employees in the attached statements of fact. This justified the assessment of penalties in the hundreds of millions of dollars, but few individuals were held accountable.

When Yates was issued, multinational companies took notice of what was perceived as a bold pronouncement. The most important aspect of the Yates memorandum from a company’s perspective was the new requirement for obtaining credit for cooperation. The DOJ now requires companies to provide all the facts about individual misconduct in order to qualify for any cooperation credit. This threshold requirement precludes any credit if the DOJ perceives that the company is withholding information that would allow the DOJ to bring individual cases. Along with the memo, Justice Department officials made stern statements exhorting companies to heed this new policy. As many noted, the policy was not a deviation from well-established principles of prosecution, but was merely a loudly voiced retread of the DOJ’s long-standing expectation that individuals committing crimes, even well-heeled business magnates, should be prosecuted.

While the stated goal of the Yates memorandum was to redirect the DOJ’s efforts toward pursuing more cases against individuals, in the year since the policy was issued, there have been no significant signs of the memorandum’s impact in large multijurisdictional cases. It seems that the Yates memorandum simply reinforced the already well-known principle of individual accountability, and perhaps added some procedural hurdles for prosecutors in managing corporate cases, such as strengthening reporting requirements in cases where individual prosecutions are declined. While a year may be an insufficient time to properly assess the effects of the memorandum, the DOJ has issued significant settlements in the interim and presumably has the information included in those agreements to initiate individual prosecutions. So why haven’t we seen a significant increase? And why didn’t the DOJ re-evaluate its pre-Yates cases, such as the cluster of cases involving the automotive industry, to bring prosecutions against those employees who were referred to in detailed statements of fact allegedly circumventing pollution or safety controls?

This article discusses why it is challenging to bring individual cases in a multijurisdictional environment and what this means when negotiating with U.S. prosecutors. It also discusses the collateral effects of the failure to bring individual prosecutions. If the DOJ cannot, or does not bring individual prosecutions after these blockbuster settlements, what does this mean for the executives who are referred to in the increasingly detailed statements of facts attached to these agreements? Is this the new age of prosecution — not Yates but Yates-lite — where managers or key executives, who may not be specifically named but are referred to indirectly and shamed by corporate admission, suffer reputational damage or a loss of livelihood instead of facing charges? If so, DOJ prosecutors evaluating corporate culpability should be very careful that the significant hurdles to individual prosecutions in multijurisdictional cases do not become an excuse to “name and shame” those who they perceive to be culpable without prosecuting them. While it is not admittedly easy to bring individual prosecutions in these circumstances, when the DOJ can’t (or won’t) proceed, a better alternative exists.

These prosecutions are not easy. While DOJ policy statements urge individual prosecutions in large corporate cases, the reality is that these prosecutions present significant challenges in the timely completion of an investigation, obtaining evidence, successfully laying a foundation for its admission in court, and securing a conviction. Prosecutors pursuing individuals are often hung up with aggressive motion practice and lengthy trials which stretch out for multiyear periods. It is not unreasonable for a prosecutor faced with these issues to abandon the effort. And there are legitimate reasons for a prosecutor’s misgivings as set forth below:

1. Statutes of Limitation for Individuals Expire While Corporate Investigations Are Ongoing

For several reasons, the DOJ does not want to bring individual prosecutions while related corporate actions are still pending. The reasons are primarily strategic, such as not disclosing the facts too early so as to not prejudice the ultimate corporate resolution, or simply because the facts are still not fully developed and the company is still in the process of making disclosures. The government has indicated that individual prosecutions are forthcoming, but this ultimately may not be feasible at the tail-end of a complex corporate investigation that has been ongoing for years. While the DOJ may want to bring prosecutions of individual wrongdoers, it is unlikely that those individuals will enter into tolling agreements that extend the statute of limitations, enabling their prosecution beyond the statutorily prescribed period for the crime being investigated. In contrast, companies routinely agree to toll the statutory period. But there is a major difference: Companies merely face stiff penalties, individuals face jail. Thus, the longer the investigation, the less likely individual prosecutions will follow the corporate settlement.

Securities, financial fraud, trade sanctions and Foreign Corrupt Practices Act cases may take an especially long time to develop. With the average foreign corruption investigation lasting more than seven years according to the 2015 Organization for Economic Cooperation and Development’s foreign bribery report, it is much less realistic that individual prosecutions will follow such investigations. While the Yates memorandum instructs prosecutors to try to resolve cases within the limitations period, that is not possible in many cases and where it is not, individual accountability cannot be achieved.

2. Evidentiary Challenges in Multijurisdictional Cases

In multijurisdictional investigations, there are significant challenges to obtaining evidence from foreign jurisdictions for admission at trial in U.S. courts. Where evidence is located in a far-flung jurisdiction, prosecutors face issues in securing and using it, especially if the evidence is obtained voluntarily from a company pressured to provide the data without a complete analysis of potentially applicable local data privacy or employment laws. Additionally, foreign witnesses are often reluctant to subject themselves to U.S. jurisdiction to testify at trial for fear that they might become a target for the prosecution in the U.S., or other jurisdictions for that matter, or simply because of the uncertainties of an unfamiliar legal system. Furthermore, in many foreign jurisdictions, a potential witness fears being ostracized where the culture strongly discourages providing incriminating evidence against a colleague.

In a cross-border investigations such as an FCPA or trade sanctions case, it is typically the cooperating company that may be in a position to quickly and efficiently locate the evidence that the DOJ needs to prosecute responsible individuals. In certain cases, the documentary evidence and witnesses are located in jurisdictions with which the U.S. has no mutual legal assistance treaties. And even when the U.S. has the ability to obtain evidence through the MLAT process, foreign agencies are usually slow to respond to U.S. requests to provide the evidence.

In view of these obstacles, corporate cases investigated by U.S. authorities are often settled with the corporate entity rather than initiating a time-consuming, possibly futile, series of individual prosecutions with a mixed chance of success. Unlike individual targets, companies are eager to settle in order to put the cases behind them and move on. It is difficult to imagine individual prosecutions following such cases, regardless of the Yates memorandum’s well-meaning intentions. And the company’s voluntary cooperation is critical. MLATs are time-consuming and, even if the DOJ chooses to issue grand jury subpoenas or execute a search warrant on a U.S. entity to obtain evidence in a foreign jurisdiction, it is by no means certain that such effort will be successful or evidence forthcoming in time for a federal prosecutor to take action.

Corporate and individual cases are resolved in two very different ways. Corporate prosecutions typically result in settlements that are essentially handshake agreements rarely scrutinized by a court. As such, a typical settlement with a corporate entity — in the form of a deferred prosecution agreement that is filed in court or nonprosecution agreement — is a much easier way for the Justice Department to proceed than testing its theories through the filing of charges. The statements of fact in DPAs and NPAs can be drafted very aggressively by prosecutors, even though proving the facts as stated in these agreements beyond a reasonable doubt can be difficult. With individuals, pushing a theory on paper will likely be tested in court.

The DOJ is also reluctant to prosecute individuals for a very practical reason that does not apply to its corporate settlements: The resources necessary for trying cases, a very labor-intensive and time-consuming process are scarce, and the task is made more challenging if the evidence is weak. Moreover, prosecutors may not be able to prove the facts they require companies to agree to in a DPA. In fact, the lack of individual prosecutions following the release of an especially forceful statement of facts in a DPA or NPA is a likely indicator that the company acceded to certain conclusions that the government may not be able to establish in court.

3. Willingness of U.S. Authorities To Defer Individual Prosecutions to Foreign Jurisdictions

Due to the evidentiary challenges in multijurisdictional cases, the U.S. authorities in some cases appear willing to defer the prosecution of individuals to foreign authorities. In cases where the U.S. and another country have jurisdiction over the same matter, the DOJ typically coordinates with that country’s authorities from the start of the investigation. According to the DOJ’s press releases, as many as a dozen different countries have cooperated with the DOJ in a single matter. The DOJ is willing to cooperate because it has limited resources, and investigations go somewhat faster when other countries’ prosecutors work locally to obtain evidence and pressure the companies into a resolution. Nevertheless, the DOJ is not willing to defer a corporate prosecution to another country, presumably because of its ability to obtain high penalties, even when that country’s authorities may be in a better position to develop evidence. Consequently, foreign jurisdictions may bring actions against specific individuals, which takes considerable time and resources, but that jurisdiction is often second in line when it comes to getting a piece of the corporate fine or penalty.

In spite of the DOJ continuing to assert its interest in pursing individuals, we still do not see the number of individual prosecutions increasing at home. Deferring to other jurisdictions the prosecutions of individuals is probably a more effective (and easy) way for the DOJ to fulfill the Yates memorandum’s mandate of prosecuting individuals, but by different means — cooperating with other countries’ prosecutors and letting them take the lead[1]. However, if that occurs, the United States should consider deferring the corporate prosecution as well, or at least allowing the foreign jurisdiction to take a larger share of the penalty.

4. Little Incentive in Prosecuting Midlevel Managers and Lack of Evidence Against Senior Executives

In addition to the evidentiary challenges and the Justice Department’s reluctance to initiate individual prosecutions when related corporate cases are still ongoing, prosecutors also face significant difficulties identifying the appropriate individuals to prosecute, even when the company is fully cooperating.

Very often, the DOJ does not want to invest its limited resources in pursuing midlevel management wrongdoers in far-flung jurisdictions, likely because of limited deterrence value. While we have seen a few regional managers prosecuted, when comparing the number of corporate settlements with the amount of individual prosecutions that should have resulted from them, it appears that in large multijurisdictional investigations, the DOJ is not following the typical prosecutorial method of prosecuting those lower in the chain and seeking their cooperation against their superiors until they can reach the higher levels of a corporation. Therefore, C-suite executives are rarely held accountable.

Moreover, there is also a practical reason for not reaching the C-suite. High-level corporate executives may be unaware of the specifics of doing business in local jurisdictions, and therefore proving the requisite mens rea for such executives is very difficult. Additionally, in large corporations with many employees with diffuse responsibilities, proving criminal mens rea for certain individuals, even at lower levels, can be challenging. If lines of responsibility are blurred and conduct is years old, the likelihood of pinpointing the misconduct to specific individuals gets harder. These days, as company wrongdoers become more sophisticated in circumventing internal controls, the suitcase of cash for a bribe payment and the “smoking gun” email are becoming increasingly hard to find.

5. Particular Challenges Applying These Principles to Cases With Scant Contacts to the U.S.

While the Yates memorandum applies to all civil and criminal attorneys at the DOJ, it is difficult to apply it uniformly to the DOJ’s multijurisdictional investigations, many of which may have little connection to U.S. domestic business, given how protracted these investigations are, and how complex the facts are, and the unique challenges the government faces in proving them. To obtain evidence outside the U.S. quickly, the government must rely on voluntary production by companies. They can use other means but that can be risky. In one case, where the government relied on undercover agents and cooperators to charge a number of individuals in a broad conspiracy, the case was dismissed[2]. The Federal Bureau of Investigation and the DOJ are also touting the increased use of more traditional methods such as undercover agents, consensual monitoring and wiretapping[3]. But the use of these prosecutorial tools to move individual cases faster is yet to be seen and will be harder to execute in a multijurisdictional case where individual targets may not come into the U.S. with any frequency. The Yates memorandum’s focus on individual accountability will not change this reality[4].

Where Do We Go From Here?

By any measure, there has not been a deluge of individual prosecutions as a result of the Yates memorandum, particularly in multijurisdictional cases with corporate admissions of serious or pervasive multijurisdictional conduct. While it may be too early to tell, the practicalities of a large cross-border corporate investigation, especially when the misconduct occurs primarily in foreign jurisdictions, suggest that the DOJ’s focus on corporate liability will not appreciably change soon.

While best practices in developing multijurisdictional prosecutions among multiple enforcement authorities are developing, the DOJ should consider whether, in cases where it is willing to relinquish holding individuals accountable in U.S. courts, it should defer the entire prosecution to the foreign jurisdiction. If applicable law provides for corporate liability in the form of administrative, civil or criminal penalties, the jurisdiction expending the most resources in prosecuting individuals should, in all fairness, receive all (or most) of the corporate penalty.

Moreover, the DOJ should reconsider the use of detailed statements of fact in corporate DPAs and NPAs outlining extensive individual misconduct without a corresponding prosecution, especially when a foreign authority is prosecuting, or will prosecute, that individual’s case. By deferring to a foreign jurisdiction with a primary interest, the DOJ can credibly comply with the Yates memorandum by providing sufficient justification for declining individual prosecutions while supporting foreign counterparts in allocating penalty monies to the jurisdiction doing the most work in bringing individual wrongdoers to account.

[1] French enforcement authorities prosecuted Total SA’s executives following a major FCPA settlement with Total in the U.S. See Similarly, the U.K. Serious Fraud Office attempted to prosecute British and Canadian businessman Victor Dahdaleh for bribing officials in the Alcoa case, another major U.S. FCPA settlement. See There were no related individual prosecutions in the U.S.


[3] Remarks by Assistant Attorney General for the Criminal Division Leslie R. Caldwell at the Taxpayers Against Fraud, Education Fund Conference, United States, Sept. 17, 2014, available at

[4] According to one commentator, 53 percent of the individuals charged by the DOJ with FCPA criminal offenses since 2008 and through the end of 2015 have been in just six cases and 72 percent of the individuals charged by the DOJ since 2008 have been in just 11 cases. Considering that there have been 69 corporate DOJ FCPA enforcement actions since 2008, this is a rather remarkable statistic. Of the 69 corporate DOJ FCPA enforcement actions, 50 (or 72 percent) have not (at least yet) resulted in any DOJ charges against company employees. See

This post was first published on Law360, New York (October 19, 2016, 5:19 PM EDT)